Memorandum submitted by Citizens Advice
INTRODUCTION
Citizens Advice has given evidence on several
occasions to this Committee and to several of its predecessor
Committees, and we welcome the opportunity to provide our views
on the Government's most recent attempt to address the enormous
problems facing the UK's system of child support, through proposals
contained in the White Paper, "A new system of child maintenance".
Citizens Advice Bureaux in England and Wales
dealt with 31,000 cases involving a child support problem during
2005-06. 19,000 of these concerned non-resident parents and 12,000
parents with care.
Citizens Advice will be responding in more detail
to the White Paper, and this evidence is therefore our initial
reaction to the Government's proposals.
A FRESH START
There must be major doubts about whether the
White Paper's proposals will in practice resolve the seemingly
intransigent problems afflicting child support. It is already
clear that the existing CSA has undergone significant renewal
and investment and will transform into the new Child Maintenance
and Enforcement Commission following legislation. The Government
has also indicated that there will not be a new computer system
to assess cases, and that the increased staff numbers currently
at the CSA are unlikely to be continued into the future.
Many of the people who seek advice from Citizens
Advice Bureaux have been left in vulnerable situations because
of the failure of the Child Support Agency over 13 years to deliver
a proper service. In the past year, non-resident parents have
found themselves faced with bills for huge amounts of arrears
and demands for payment even when they have supplied all the information
asked of them and have co-operated with the Agency. Parents with
care, and consequently their children, are faced with debt and
hardship because maintenance is not being paid, or worse still
has not been passed on to them by the Child Support Agency.
Citizens Advice accepted the Government's assurances
prior to the 2003 reforms, which introduced a simpler formula
for calculating child maintenance. Although the amount of maintenance
produced using the new formula would be lower, the promise of
easier assessment and quicker payment led us to accept that children
would overall receive lower levels of support, but under a more
efficient system. These expectations were quickly dashed.
There will inevitably be some scepticism that
yet another child support scheme will achieve the simplicity and
ease of operation intended. We are concerned that the imperative
now should be to ensure that child maintenance is quickly assessed
for parents using the child support system, and payment arrangements
are set up quickly and enforced if necessary, in order to get
money flowing to families and children. This is the only way to
build public support and confidence in the scheme.
We take the view that getting the scheme to
work is more important than other measures outlined in the White
Paper such as the compulsory joint registration of births, which
appears to be aimed more at altering behaviour and cultural attitudes
towards financial responsibility for children, and less at transforming
the effectiveness of child support.
The pace of reform is disappointingly slow.
Although the CSA will begin to be wound up as soon as legislation
can be passed, it is unlikely that the new Commission will be
fully up and running until about 2013.
THE ASSESSMENT
PROCESS
The Government proposes to revise the assessment
process to use gross income figures held by HMRC, taking a fixed
percentage equivalent to the current formula for number of children,
with departures from this only in specified circumstances. The
aim appears to be to get to a calculation of maintenance liability
more quickly and easily, with fewer opportunities for the non-resident
parent to dispute the assessment or to besiege the assessment
with a series of changes of circumstance all of which prevent
agreement and payment.
The thrust of this approach is welcome, as a
large part of the Agency's problem has been that it cannot begin
to enforce a child support assessment if it is in continual dispute.
It is welcome that information held for tax purposes will be used
as this will provide a basis for assessment for a majority of
fathers. However, the possibility that self-employed and other
fathers will be able to minimise their taxable income remains
serious and will need to be taken into account.
ENCOURAGING PARENTS
TO MAKE
THEIR OWN
ARRANGEMENTS
Removing the rule that requires parents claiming
income-related benefits to apply to the Child Support Agency could
help remove some of the pressure placed on the system. It seems
sensible to draw a conclusion that a measure which was designed
to reinforce a message that parental financial responsibility
exists whatever the parent's circumstances should be balanced
against pragmatic considerations about whether the administrative
costs are justified. The Government is proposing to continue the
requirement for all parents, including those on benefit, to contribute
some maintenance. These cases involve transferring £5 a week,
from one parent on benefit to another. Our initial reaction is
to wonder how effective it is to enforce payment of £5 or
£7 from benefit income, and whether parents on benefit will
pay this sum out of benefit incomes which may be as low as £54
per week.
The new proposals also include providing a package
of information and guidance services which parents will be expected
to use before involving the new Child Maintenance and Enforcement
Commission, C-MEC.
We support the proposal to introduce choice
and remove the requirement to cooperate from parents on benefit.
We are concerned, though, that many parents on low incomes will
not be in a position to agree a sustainable voluntary arrangement,
because the separation is not amicable, because the former partner
is no longer around, because his actual income is not transparent
or agreed, and because promised payments do not materialise. It
is understandable that any new system replacing the CSA will want
to try to minimise its caseload in order to guarantee its own
effectivenessbut this will only prove to be a viable approach
if parents are genuinely able and willing to make private arrangements.
The availability of good quality advice, including face-to-face
advice as well as websites and other information, will be critical
if the Government's strategy is to stand any chance of success.
ADVICE AND
INFORMATION
We believe that the CSA should now take greater
responsibility for informing people currently in the child support
system about their current position and about the effect any changes
may have on them. Much of publicity surrounding the publication
of Sir David Henshaw's report, and the Government's initial response,
in July 2006 suggested that the Child Support Agency was being
scrapped. This caused some people seeking advice from our bureaux
to wonder whether their liability for child support had come to
an end, and prompted others to seek advice about how an outstanding
application for maintenance would be affected.
Clearer information to all individual users
of the CSA should have been provided so that no-one was left in
any doubt about how the announcements affected their current position,
and how changes in the future might alter it. Large numbers of
the enquiries received by Citizens Advice Bureaux are from parents
who are paying or receiving money under the child support scheme
dating from before 2003, and these people, as well as everyone
else, might reasonably expect to be told what the proposed reforms
meant to them.
We have concerns about the equity of introducing
a "clean break" between the current child support schemes
and the proposed new scheme. We are still seeing large numbers
of clients who are non-resident parents who believe they would
be paying a lower proportion of their income if only they could
be re-assessed under rules that were supposed to come in in 2003.
The continuing need for a "legacy"
system means that there will be many parents, including those
being assessed at this very moment, who will be in the previous
systems for many years to come.
CAB ADVICE
The White Paper indicates that there will be
a "major role" for the third sector in helping parents
to make their own arrangements. Citizens Advice welcomes the opportunity
to discuss with Government how the CAB service might increase
its capacity to advise parents about child support. The climate
is currently extremely difficult for independent advice. Funding
for both Citizens Advice, the umbrella body for the CAB service,
and for local Citizens Advice Bureaux, is faced with increased
restrictions. The Carter review of legal aid and the Government's
subsequent White Paper may, if implemented without change, result
in fewer Citizens Advice Bureaux offering advice and information
supported by legal aid contracts.
THE MAINTENANCE
DISREGARD
Before it was published, indications were that
there would be a substantially higher disregard of maintenance,
and that parents with care would care on benefits would
be allowed to keep much more of any child support payments received.
It is disappointing that there is to be a delay of two years before
the disregard is extended to people receiving child support under
the "old rules" from pre-2003, and that the commitment
to introduce a substantially higher disregard will not be introduced
until after 2010.
Many thousands of children could be lifted out
of poverty, helping to meet a key government target, through the
introduction of a partial disregard of maintenance income, as
low as £30 or £40. Tax credits already include a complete
disregard of child maintenance income. Citizens Advice would welcome
a proper review of the costs of introducing a maintenance disregard
earlier and at a much higher level than now, which took into consideration
the contribution the move would make to eliminating child poverty.
TOUGHER ENFORCEMENT
The Child Support Agency has had quite strong
powers to enforce child support awards for some time, but has
too frequently been unable or unwilling to use them. It has been
too easy for non-resident parents to dispute the accuracy of an
assessment and for delays to set in, causing a spiral of poor
administration and preventing child support from being collected
and paid. The Agency is already, as part of its Operational Improvement
Plan, moving to obtain liability orders and using private debt
collection agencies and bailiffs to collect child support debts.
We welcome the Government's indication that
it does not intend to write-off substantial amounts of the £3.5
billion owing to both the Treasury and to parents with care. We
understand that some cases outstanding at the Agency, which potentially
involve substantial debts, have such poor information attached
to them that it would be extremely difficult for the Agency to
seek to enforce collection. It is perhaps worth noting that much
of the problem of outstanding debts is likely to be due to historically
poor administration by the Agency.
This is another area where it is misleading
to suggest there will be a fresh start or clean break with the
past, as a residuary Agency will be collecting child support debts
for many years to come. Even with the renewed vigour at the CSA
now with the Operational Improvement Plan, it is not clear how
the Agency intends to clear the debt within a reasonable time,
nor how the responsibilities for historic debts will continue
with the transfer to the new Commission.
Recent evidence from Citizens Advice Bureaux
shows there are problems with the current debt collection strategy.
In one case from October 2006, a woman had been
told by the Agency in February 2006 that the £2,300 owed
to her was being passed to the enforcement department. It was
not until months later when the client sought advice that it transpired
that no action had been taken.
In November 2006 a client complained that he
had arranged a direct debit to pay child support but the CSA was
not collecting any money, and was instead threatening the use
of debt collectors.
In September 2006 a client contacted a bureau
as he had a liability and a court appearance for CSA arrearsthis
followed over 40 different assessments, and two cheques that had
been sent to the client for overpayment of child support.
In July 2006 a client received a letter stating
arrears over £1,500, after two letters saying he owed nothing.
In October 2006 a woman came to a bureau as
she was considering leaving a job and reclaiming income support.
The client had debts approaching £6,000, and had been trying
to get the CSA to enforce maintenance for the past three years.
Also in October a distressed and angry client
with two teenage sons called at a bureau complaining that she
had never received a penny in support from her ex-husband who
had consistently managed to avoid payment by leaving jobs and
disputing assessments, despite involvement of bailiffs at one
stage.
Citizens Advice is continuing to work as closely
as possible with the CSA to draw attention to debt collection
and enforcement issues.
JOINT REGISTRATION
OF BIRTHS
We are concerned that the proposal to require
both parents to register births will have consequences other than
the reinforcement of parental responsibilities towards children.
Registrars may not regard themselves as being in a position to
enforce or even encourage joint registration and this is likely
to cause practical problems. In addition, we are worried that
some families might miss out on claiming child benefit as a result
of the proposal. An original birth certificate must be sent to
HMRC to claim child benefit, and the full birth certificate is
only issued after registration.
January 2007
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